CHT — Interim / Quarterly Report 2021

Nov 1, 2021

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3Q 2021 Operating Results

Nov. 1, 2021

1

Disclaimer

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audit /review work, which could result in significant differences from this preliminary unaudited financial information.

NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements about Chunghwa’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to the risks outlined in Chunghwa’s filings with the U.S. Securities and Exchange Commission on Forms F-1, F-3, 6-K and 20-F, in each case as amended. The forward-looking statements in this presentation reflect the current belief of Chunghwa as of the date of this presentation and Chunghwa undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date, except as required under applicable law.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES

A body of generally accepted accounting principles is commonly referred to as "GAAP". A non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. We disclose in this report certain non-GAAP financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iii) other expenses, net, (iv) income tax, (v) cumulative effect of change in accounting principle, net of tax and (vi) (income) loss from discontinued operations.

In managing our business we rely on EBITDA as a means of assessing our operating performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business.

EBITDA is not a measure of financial performance under U.S. GAAP or T-IFRSs. EBITDA should not be considered as an alternate measure of net income or income from operations, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with U.S. GAAP or T-IFRSs, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company's overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. These non-GAAP measures are not in accordance with or an alternative for GAAP financial data, the non-GAAP results should be reviewed together with the GAAP results and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

2

Business Overview

3

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Home Wi-Fi Devices Increased adoption YoY 337% of higher price plans

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Home
Wi-Fi Mobile
(Mesh)
Always
Broadband
Connected
Fixed
Broadband MOD
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300Mbps ↑ Customers YoY 48%

Continued growth of ARPU and revenue

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#1 Mobile Services Provider

#1 Mobile Revenue[(a)(b)(c)]

#1 Mobile Subscribers[(c)]

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CHT
38.8%
Other
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Source: Company data, MOTC and NCC statistics Note :

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a) Market share as of Aug. 2021
b) Revenues are based on T-IFRSs
c) Excluding IoT SIMs
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Other,
15.9%
CHT,
FET, 36.1%
23.9%
TWM,
24.1%
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Better Performance in Mobile Service Revenue

Highest Subs & Lowest Churn[(d)]

(Thousand)

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(Billion) (Thousand)
18 6%
14,000 1.20%
16 4%
14 12,000 1.00%
2%
12 10,000
0% 0.80%
10 8,000
-2%
8 (e) 0.60%
-4% 6,000
6
0.40%
-6% 4,000
4
0.20%
2 -8% 2,000
0 -10% - 0.00%
3Q20 4Q20 1Q21 2Q21 3Q21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21
CHT TWM FET CHT TWM FET CHT TWM FET CHT TWM FET
Note :
Note : For TWM and FET, mobile service revenue is derived from mobile ARPU d)Churn rate for postpaid subscribers
under Residual Value Method times the average subscriber number. e)Excluding the one-time round-trip adjustment of IoT SIMs
revenue YoY growth rate Subscribers Churn rate
(before IFRS 15 adoption)
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Note : For TWM and FET, mobile service revenue is derived from mobile ARPU under Residual Value Method times the average subscriber number.

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Fixed Broadband Service

Broadband Revenue

Fixed Broadband Subs

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Continued ARPU growth for
8 consecutive quarters Fiber ≥300M
725 733 734 742 749 YoY 48 %
ARPU( NT$)
8,000
700
7,000 4,365 4,348 4,339 4,358 4,363
6,000 5,370 5,416 5,456 5,535 5,640 600 9% 10% 11% 12% 14%
500
5,000 30% 30% 30% 31%
31%
4,000 4,528 4,578 4,559 4,631 4,697 400
300
3,000
200 44% 43% 42% 41% 40%
2,000
1,000 100
17% 17% 17% 16% 15%
0 0
3Q20 4Q20 1Q21 2Q21 3Q21 Sep 20 Dec 20 Mar 21 Jun 21 Sep 21
(NT$ mn) Broadband Access Data Communications ARPU
ADSL Fiber (<100M)
(Thousand)
Note1 : Broadband ARPU is calculated as access plus ISP Fiber (≥100M~<300M) Fiber (≥300M)
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Note1 : Broadband ARPU is calculated as access plus ISP Note2 : Revenue is calculated based on T-IFRSs

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MOD/ IPTV Service

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4,000 1000 260 Packaging SVODs ALL PASS 256
to enhance SVOD revenue
900 250
3,500 915 906 904 911 921 947 246
800
3,000 240
700 238
240
2,500 2,085 2,080 2,069 2,065 2,068 2,067 600 232
2,000 500
400
1,500
220
300
1,000
200
500
100
- 0 200
2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21
(Thousand) MOD Subs MOD Revenue (NT$ mn) SVOD revenue (NT$ mn)
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ICT Business

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Excluding large
project impact
YoY
3Q20
Large 1%
projects
revenue
雲端
cloud services
3Q20 4Q20 1Q21 2Q21 3Q21
YoY
32%
Cyber Security
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YoY 11%

YoY 0%

YoY 16%

8

Financials Overview

9

Financials: Income Statement Highlights

	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
(NT$bn)	Q3 2021	Q3 2020	Growth %	9M 2021	9M 2020	Growth %
Revenues	50.89	52.17	(2.5)	150.59	148.13	1.7
Operating Costs and Expenses	39.45	41.73	(5.5)	116.76	116.54	0.2
Income from Operations	11.44	10.72	6.7	33.83	31.86	6.2
Net Income2	9.40	8.34	12.8	27.15	25.19	7.8
EPS	1.21	1.07	12.8	3.50	3.25	7.8
EBITDA	21.06	20.09	4.8	62.48	58.81	6.2
EBITDA Margin (%)	41.40	38.51		41.49	39.70

Note:

1. Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.

2. Net income attributable to owners of the parent.

3. EBITDA = operating income + Depreciation & Amortization.

4. The calculation of growth rates is based on NT$mn.

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Financials: Business Se ment Revenues g

(NT$bn) Q3 2021	(NT$bn) Q3 2021	Q3 2020	Growth %	9M 2021	9M 2020	Growth %
Domestic Fixed	15.66	18.85	(16.9)	46.66	49.23	(5.2)
Local	6.05	6.16	(1.7)	17.90	18.42	(2.8)
DLD	0.51	0.51	0.2	1.46	1.53	(4.4)
Broadband Access	4.70	4.53	3.7	13.89	13.56	2.4
MOD	0.95	0.91	4.8	2.78	2.73	1.7
ICT and Other Services	2.33	5.70	(59.0)	7.35	9.83	(25.2)
Mobile	22.84	21.63	5.6	68.05	65.27	4.3
Mobile Service Revenue	14.74	14.22	3.7	43.23	42.52	1.7
Sales of Mobile Handsets and Wearable Devices	7.76	6.97	11.2	23.89	21.81	9.5
ICT and Other Services	0.34	0.44	(21.4)	0.93	0.94	(1.5)
Internet	8.28	7.46	11.0	23.70	22.40	5.8
Data Communications	5.64	5.37	5.0	16.63	16.03	3.7
Application VAS	2.08	1.65	26.2	5.51	4.79	15.1
Services Provided to the government	0.55	0.44	26.8	1.56	1.58	(1.6)
International Fixed	2.11	2.14	(1.5)	6.45	6.56	(1.6)
ILD	0.54	0.57	(4.9)	1.65	1.92	(14.3)
Leased line	0.53	0.60	(12.7)	1.64	1.63	0.8
ICT and Other Services	0.20	0.18	14.9	0.68	0.65	4.8
Others	2.00	2.09	(4.4)	5.73	4.67	22.8
Total	50.89	52.17	(2.5)	150.59	148.13	1.7

Note:

1. Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.

2. The calculation of growth rates is based on NT$ mn.

3. Businesses shown under each segment are highlighted; therefore, sum of the highlighted revenues is not equal to the total.

11

Financials: Costs & Expenses

	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
(NT$bn)	Q3 2021	Q3 2020	Growth %	9M 2021	9M 2020	Growth %
Operating Costs	32.05	34.50	(7.1)	95.00	94.70	0.3
Operating Expenses	7.40	7.23	2.3	21.76	21.84	(0.4)
Marketing	5.24	5.10	2.7	15.25	15.45	(1.3)
General and Administrative	1.22	1.15	6.1	3.80	3.51	8.3
R&D Expense	0.94	0.98	(4.4)	2.71	2.88	(6.0)
Total	39.45	41.73	(5.5)	116.76	116.54	0.2

Note:

1. Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.

2. The calculation of growth rates is based on NT$ mn.

12

Financials: Cash Flow

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Consolidated
Growth Growth
(NT$bn) Q3 2021 Q3 2020 9M 2021 9M 2020
% %
Net Cash Flow from
21.29 20.44 4.2 48.99 46.91 4.4
Operating Activities
CapEx 8.03 4.73 69.9 23.03 14.03 64.2
Free Cash Flow 13.26 15.71 (15.6) 25.96 32.88 (21.1)
Cash and Cash Equivalents
23.59 17.70 33.2 23.59 17.70 33.2
at the end of period
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Note:

1. Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.

2. The calculation of growth rates is based on NT$ mn.

3. Free cash flow is calculated by subtracting CapEx from Net Cash Flows from Operating Activities.

13

Operating Results vs. Forecast

Consolidated	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
(NT$bn) Q3 2021 (A)	Q3 2021 （E）	Achieving %	9M 2021 (A)	9M 2021 (E)	Achieving %
Revenues 50.89 50.40~50.49		100.8~101.0	150.59	150.19~150.39	100.1~100.3
Operating Costs and Expenses 39.44 39.97~40.03		98.5~98.7	116.76	119.48~119.61	97.6~97.7
Income from Operations 11.44 10.37~10.52		108.7~110.3	33.83	30.52~30.85	109.6~110.8
Net Income2 9.40 8.21~8.70		108.0~114.5	27.15	23.93~24.68	110.0~113.5
EPS 1.21 1.06~1.12		108.0~114.5	3.50	3.09~3.18	110.0~113.5
EBITDA 21.06 19.88~20.00		105.3~105.9	62.48	59.17~59.47	105.1~105.6
EBITDA Margin (%) 41.40 39.43~39.63			41.49	39.39~39.54

Note:

1. Financials are prepared in accordance with T-IFRSs. Figures for 2021 are unaudited.

2. Net income attributable to owners of the parent.

3. EBITDA = operating income + Depreciation & Amortization.

14

Effective and Efficient Capital Expenditure

Capital Expenditure

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NT$
bn
20.6%
20%
50
43.1
1.7 15.3%
40 2.2
13.2%
11.3%
8.8
28.6 11.6% 9.5%
23.0
30 1.1
1.3 24.2 23.5 1.3
0.2 10%
2.8 1.8 1.0
1.1 0.8 15.7 14.0 0.9
20 1.4 1.4 0.6
10.7 0.3
7.8 8.8 0.6
11.8
5.2
10
14.7
12.7 12.1 11.5
8.8
7.3
0 0%
2018 2019 2020 2021(E) 9M 2020 9M 2021
Domestic Fixed Mobile Internet International Fixed Others
CapEx
CapEx as % of Revenue
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Budgeted CapEx for 2021: NT$43.1 bn

Continue to focus on core businesses for future investments

• 5G

• FTTx

– IDC/ Cloud

• Submarine cable

Note: Actual capital expenditure are cash-based.

15

Awards and Recognition

• Awarded by Frost & Sullivan with Best Practice Awards in multiple categories, including Taiwan Telecommunication Services Company of The Year, Taiwan Mobile Data Services Company of the Year and Taiwan Data Center Services Company of the Year

• Won the National Brand YUSHAN Award in two categories

• Top prize in Outstanding Enterprise Category- 3C ICT Services

• Best Product Category – MOD services

• Received three gold awards, one silver award and one bronze award in The Sustainability Action Awards of the 2021 Taiwan Corporate Sustainability Award.

• Gold awards in Agriculture IoT, carbon management in supply chain sustainability and net-zero carbon dioxide emissions.

• Silver award in ICT Application on Epidemic Prevention

• Bronze award in technology talents cultivation

16

Q&A

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